Business Strategy Report: Uber's Strategic Planning and Analysis

This business strategy report provides a comprehensive analysis of Uber's operations. It begins with an introduction to business strategy and then delves into Uber's mission, vision, and objectives. The report examines the impact of the macro environment through PESTLE and SWOT analyses, and utilizes Ansoff's growth vector matrix to explore growth strategies. It then assesses Uber's internal environment and capabilities, applying the McKinsey 7S model and VRIO framework to evaluate resources and competencies. Porter's Five Forces model is employed to analyze the competitive landscape, and the report concludes with an interpretation of strategic planning through various theories, culminating in a strategic management plan with tangible objectives and actions. The report highlights Uber's strengths, weaknesses, opportunities, and threats, providing a holistic view of its strategic positioning.

Business Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Impact and influence of macro environment.........................................................................3
M1 Analyse macro environment to determine strategic management decisions........................5
TASK 2............................................................................................................................................6
P2 Internal environment and capabilities of organisation...........................................................6
M2 Strength and weaknesses of internal capabilities, structure and skill sets............................9
TASK 3............................................................................................................................................9
P3 Porter's Five Forces Model....................................................................................................9
M3 Strategies to improve competitive edge and market position.............................................12
TASK 4..........................................................................................................................................13
P4 Interpret and devise strategic planning through different theories......................................13
M4 Strategic management plan with tangible and tactical strategic priorities and objectives. 14
D1 Produce a set of valid strategic directions, objectives and actions......................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
Business strategy refers to a roadmap that is used by organisation to devise their future
plans and objectives. It is a step by step direction used by companies to reach their goals. There
are a number of decisions required to be taken by organization in it which is then followed by
management and all the employees of organisation (Sheng and et. al., 2019). In the following
business report a business strategy for Uber is devised. Uber is operating in transport industry
and was established in 2009.Company offers a number of different services to its customers
including cab services, rental services for vehicles, food delivery services, courier services and
so on. An analysis of internal and external capabilities of the company is conducted in this report
in order to come up with a strategical plan that will successfully help Uber to attain all its
business objectives and goals.
TASK 1
P1 Impact and influence of macro environment
Strategy involves all the goals and priorities that determine actions which are necessary
to achieve objectives through mobilizing the resources and executing various actions as well. It
basically determines ways in which all the goals will be achieved through the means available.
Mission-” Uber's mission is to bring transportation everywhere for everyone.”
Vision- Vision of Uber is to generate transportation that is safer, reliable and cheaper. They also
aim at becoming transportation that creates maximum job opportunities and incomes for drivers
as well”
Objective-Major objective of organisation is to increase their revenues while attaining
competitive edge in market.
Pestle analysis
Pestle analysis helps businesses to deal with external factors which are effecting business
or can bring benefits to business:Below mentioned are these factors:
Political factors affecting Uber and its functions includes taxes, trade policies, trade
restrictions, bureaucracy and tariffs. These are problems that company face due to unclear
concept of their business in different governments throughout the world (Kong, and et. al.,
2020). Whilw working in different countries UBER requires to analyse all the political factors in
the country and then formulate strategies fulfilling all the requirements.
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Economical factors include inflation rates, exchange rates, unemployment and so on.
When taking Uber into consideration Uber can use its flexible pricing model to take advantage of
economic factors. It will allow them to achieve success and make benefit from economic
conditions prevailing in an economy.
Social factors are the creative and demographic factors and culture that decide behaviour
of consumer in market. The pick and drop features of Uber just with a click are helping
organisation to take advantage of social factors. They are taking the use of convenience factor in
social environment to enhance their business.
Technological factors are related to innovations that are brought by organisations in
order to make sure that they are successfully changing their operations as per external
environment. Maintaining their mobile applications and bringing changes regularly in
organisation will allow them to provide competitive edge.
Legal factors are the factors which help businesses in determining their scope. There are
a number of policies and laws affecting business that include intellectual property rights, industry
relation, license permits and so on. There is a number of property rights owns by UBER in order
to legalise their business and patents are attained to make sure that their competitors cannot copy
their strategies.
Environmental factors take into consideration climatic changes, natural disasters,
temperature and so on. In order to make sure that they are not negatively influencing
environment they are allowing pool facilities in their cabs as well.
Ansoff's growth vector matrix
There are four strategies that can be successfully adopted by a business when they are
looking to grow. These strategies have different objectives and focus upon different markets.
Below mentioned are the four strategies that can be used by Uber for their growth:
Market penetration is the strategy in which Uber requires to make sure that they are
successfully investing cost and efforts to attain maximum market share in the market in which
they are already dealing. There are a number of ways such as effective communication thorough
which organisation can achieve it (Chen and et. al., 2018). Uber is using Promotional tools to
expand their business in markets and enhance more consumers.
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Product development is the strategy in which organisations need to develop new products
and services for consumers. In this case Uber can successfully work on various services in order
to make sure that their customers are provided with safe and convenient rides.
Market development is the third strategy in which market for product or service is
expanded. Uber is successfully looking to set up their business in various part of world. With the
help of this strategy they can effectively use market research and increase their customer base
while entering into different markets.
Diversification is the last strategy in Ansoff's matrix under which a new service can be
launched by Uber in a totally new market. Company have already ventured into food delivery
through Uber eats, they can now venture into various others sectors to increase their revenues
and profits.
SWOT analysis
Strengths Weaknesses
The efficient pricing strategy that business is
using is one of its largest strength. This helps
in generating profits as well as relationship
with consumers.
The low investment required by business is
also one of its strength, Uber is successfully
running on digital platform and requires
limited investment.
The scandals and controversies that Uber have
faced recently are huge weakness for company.
These lead to negative publicity or organisation
as well.
Uber is dependent upon external drivers who
cannot be controlled efficiently and it leads to
weakness for company. Usage of internet is
also creating dependency factor.
Opportunities Threats
Increased digitalisation in market is a great
way for Uber to enhance and develop their
technologies in ways so that they can increase
their customer base.
There are also a number of other areas of
service in which Uber can enter such as special
transportation like ambulance.
Uber have used diversification in order to use
There are a number of times when company
have to face lawsuits due to misbehaving
drivers and so on. It leads to negative effect on
profits of organisation and they require
strategies in order to abide by all the laws.
There are a number of companies emerging in
digital space which are setting up competitive
environment for Uber (Madhushree, Kumar
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the opportunities and development benefits
available to them such as Uber eats.
and Aithal 2018).
M1 Analyse macro environment to determine strategic management decisions
When looking at macro environment of Uber there are a number of different factors that
have had an effect on business. The major factor that is affecting Uber is technological factors.
As the company is completely working on digital media platform it is necessary that they are up
to date with technology. Updates and advance technology can be one of the major benefit for
Uber and on the other hand out dated technologies can also be a threat and weakness for the
companjy.
TASK 2
P2 Internal environment and capabilities of organisation
Strategic capabilities consists of all those competencies and resources that are utilised by
an organisation in order to successfully compete in business environment. Resources as well as
competences are the two major components of strategic capabilities. Resources are assets of a
business that can be called upon whereas competences are assets that are used effectively. Uber
has its technological advancements and funds available that are competences and resources of
business (Aldea, Iacob and Quartel, 2018).
Resource based view strategy is one of the managerial framework that helps an
organisation in determining different strategic resources that can be successfully used by an
organisation and exploited to attain competitive advantage.
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McKinsey's 7S model is applied in organisations in order to make sure that business is
successfully using new strategies in business identifying different areas of change in future.
There are 7 S in this model which is divided as hard S and soft S. The hard factors include
strategy that is plan derived to achieve competitive advantage, structure that is division of
business and various departments which helps in analysing that which department is responsible
for what in an organisation and the third is systems, which helps understanding processes and
procedures which are revealing different activities of business. In order to derive competitive
advantages from hard factors in this theory Uber is using diversification and intensive
promotional tools strategies. The structural division of organisation is based in functions. It
allows them to successfully finish all the tasks in organisation and each functional department is
responsible for their activities. The systems in Uber are well derived where the orders come from
top level executives and the managers are responsible to effectively communicate all this
information to their subordinates.
On the other hand the soft S comprises of skills which are ability of people in an
organisation to successfully perform their jobs, staff is related to human resource requirement in
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organisation, style is ways in which various tasks are managed or interaction along with ways of
working at different levels and shared values that is a description of standards, norms and guides
for behaviour of employees. In Uber proper training and development are provided to
employees in order to make the skills in employees competitive. They are providing training
which helps the staff to incorporate new skills and experience as per changing external
environment to stay in the competitive market. The style used in organisation is informal which
helps employees to successfully communicate with their superiors. The shared values and
believes in organisation is to believe in all the cultures. There is no discrimination in organisation
which helps in retaining employees and boosting their morale as well.
These 7 factors can be applied by top level management of Uber in order to guide the
human resource and also make potential use of them (Fraser, 2019). It is necessary that all these
are kept into consideration in order to make sure that company is attaining competitive advantage
over its competitors.
VRIO Framework
VRIO analysis looks at various resources of an organisation and assess whether or not
these resources providing organisation with sustainable competitive advantage. VRIO stands for
valuable, rare, imitability and organisation. Below table depicts VRIO for Uber where
innovation, customers loyalty, service quality and financial position of firm are some of its major
resources. With the help of VRIO depicted below it can be analysed by innovation brings
temporary advantage for organisation, consumer loyalty brings parity, service quality provides
competitive advantage and financial resources are most important providing sustainable
advantage for business.
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Benchmarking
Benchmarking is helping organisations to achieve competitive edge. It also helps
business to adapt, grow and thrive in changing environment. Their are majorly four types of
benchmarking: Performance benchmarking includes the KPI's of Uber. There are a number of
technological factors that are enabling Uber to successfully run. It is helpful for
organisation as it helps in identifying the gaps in their services as well. Uber uses profit
margin and customer turnover ratio as their major KPI’s. it is a great way for company to
measure their development and bridge the gaps in their services as per the requirement of
consumers. Practice benchmarking refers to the practice through which Uber can successfully fill
the gaps in its performance (Park and Mithas, 2020). There are a number of changes
brought in technologies of Uber that create practice benchmark for organisation.
Organisation is have updated their application with Google maps, feedback systems,
customer reviews along with estimated fares evaluation in order to enhance their
services,. All these steps are effective in bridging the gaps in practice. Internal benchmarking helps Uber in understanding that is required to be brought in its
various units, departments, geographies or programs. These are successfully helping
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organisations to make sure that they can successfully standardise their performance and
do better in the competition they need to face. External benchmarking in this Uber is compared to its competitors in the similar
industry and they achieve benefits from it thereon. External benchmarking provides
maximum benefits to Uber. Uber uses strategies such as low pricing and extensive
promotions to face competition and make best use of external benchmarking.
Value chain analysis
Inbound logistics in primary activities in Uber includes the technologies, hardware and
equipments. Operations are requesting of ride, ride and pay. The outbound logistics does not
necessarily apply on service industry. Marketing and sales of company is essential factor in order
top deal with competition in market (Yuan and et. al., 2020). Digital media is used recently by
Uber that successfully helps business. There are a number of factors such as digital payment and
so on which help in spreading positive word of mouth. Services in Uber include high level of
customer services for riders so that they can conveniently complete their ride.
Other than this there are supporting activities that includes the infrastructure which is
mainly the software set up of Uber. Human resources of organisation and technological
development. Procurement of various raw materials and other resources in organisation are also
included in supporting activities for Uber.
Cost-Benefit Analysis
Cost-Benefit analysis refers to adding all the benefits of an action that is to be taken and
then comparing it with all the cost that is involved. It is required by Uber to make sure that they
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are successfully conducting cost-benefit analysis of the strategies they are adopting. In order to
successfully apply it on business strategy Uber needs to first brainstorm the benefits and costs,
assign a monetary value to the costs, assign a value to the benefits and then in the end compare
both of these. The employees in Uber are asked to come up with new ideas. Some incentives are
also provided to employees for this which enables them to brainstorm cost and bring benefits to
the organisation. It is necessary that the employees are continuously motivated and encourages
bringing cost benefit for organisation. Uber is also regularly keeping a check on the strategies of
their competitors in order to make sure that they stand out in competition. Transferring some of
the monetary benefits to employees is a great a way to make sure that employees are brain
storming cost benefit analysis for the organisation.
M2 Strength and weaknesses of internal capabilities, structure and skill sets
There are a number of skill sets that helps Uber to successfully conduct their business. It
is necessary for company to make sure that they are focusing on strengths which are regular
changes, technological advancement and structure of business (Sia, Soh and Weill, 2016).
Weaknesses of company are the competitors and emerging competition in market. The skill sets
required by managers is to attain cost benefit analysis to take essential decisions required.
TASK 3
P3 Porter's Five Forces Model
Balance Scorecard
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A balance scorecard is used in strategic management in order to identify and improve
performance of internal business function and their effects on external outcomes of businesses.
Below mentioned are 4 characteristics of balance scorecards applied on Uber:
Customer and stakeholders perspective for Uber is a strong factor as there are a number
of factors such as driver ratings, acceptance, cancellation, fair reviews and so on that helps on
improving the experience of customers. When taking Internal processes into consideration
company also focuses on improving their quality, costs and schedules (Bıçakcıoğlu, Theoharakis
and Tanyeri, 2019). Innovation and diversification used by company is helping it to set up their
business successfully. The third factor is Learning and growth perspective, where company
makes sure to measure their performance. All the steps taken by business depends upon their
customers reviews. Financial perspective is another factor in which company is measuring their
financial ratios, variances in budgets along with various income targets. With the help of balance
scorecard for Uber it becomes easy for business to make their services fast, reliable and also
affordable for all their customers.
Stakeholder Analysis:
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It is a frameworks that is used to monitor the activities of various stakeholders such as
customers, suppliers, vendors and so on. For this, stakeholder matrix is undertake that is based
on two imperative factors, Power and Interest. In context of UBER, it is vital for mangers to
carry out stakeholders analysis in order to maintain good relationship with them. It comprises
four quadrants that are elaborated below:
 Manage Closely: There are some stakeholder of company who posses high power as
well as interest in business so that they should manage in an efficient manner to maintain
good relationship.
 Keep Satisfied: These people have high power but lower interest. So, they need to stay
satisfied as they can withdraw investment at any point of time.
 Keep informed: Stakeholders of UBER have lower power but higher interest, so
managers need to informed them in regular intervals to ensure their higher involvement
throughout project life cycle.
 Monitored: These stakeholders of respective orgaization owns low interest and low
power. Here, need arises to monitor their activities constantly in order to retain them for a
longer period of time.
Porter' s Analysis:
It is a tool that is used to analyse the competitive environment for a business entity. It
comprises various elements that help to monitor the level of competition prevailing in industry
and formulate strategies to earn higher profit margins (Anwar and Hasnu, 2016). Porter's
analysis of UBER is mentioned below:
 Industry Rivalries: It implies competition among existing organisations within industry.
UBER has expand its business in different countries and need to face extensive
competition from other companies such as OLA, Curb and so on. These rivalries
competing with entity on various aspects such as price, quality services, convenience to
riders and so on. Thus, it is working in highly competitive industry that make it essential
to prepare strategies to sustain at market place for a longer period of time. Uber is
continuously analysing market in bringing in technological changes in their applications
to deal with rivalry.
 Threat of new entrants: It refers to the barriers for new firms to enter into a new business
environment. In case of UBER, there is high threat of new entrants as companies business
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model as well as concept is easy to copy. In addition entry barriers, rules and cost to enter
in market is comparatively low. Hence, it is easy for new entities to enter as well as
sustain at market place. Uber is generating loyal customers in order to make sure that
they do not have any threats from new entrants.
 Bargaining Power of Suppliers: Vendors are crucial part of organisation as they serve
necessary resources to operate business. As per UBER business model, it do not posses
own vehicle rather depend on drivers. Thus barging power of suppliers(drivers) is high
for entity. They are maintaining good relationship with their suppliers in order to make
sure that they can decrease the bargaining power of suppliers.
 Bargaining Power of Buyers: Customers are the key-elements for a company. IN case of
UBER, it is analysed that customers are price sensitive and they can easily shift over
other brands who provide them services on relatively less price (Suoniemi and et. al.,
2020). Hence, customers have the power to negotiate with company on fare as there is
other rivalries present in the market place. Uber need to focus on consumer. They are to
develop strategies that will help them to stand out in market. The regular offers provided
by Uber and discounts help them to retain consumers.
 Threats of Substitute: In case of UBER, there is high that of substitute. Apart from
competitors there are also taxi and local transportation vehicles that can compete with
company by providing convenient services on relatively less price. Uber is using
competitive pricing to manage the threats from their substitutes.
Ansoff's matrix in product and market strategy
When applying Ansoff's matrix in product and market strategy for Uber it can be
recognised that company is already using penetration and diversifying strategies. Product
development requires huge investment by company as they are already providing a number of
services and in order to come up with new services huge investment in technology is required by
Uber. However, using market development can successfully help Uber to develop a market for
them in the areas they are still not functioning. The requirement for transportation and logistics is
increasing with globalisation. Due to these changes in external environment it is a great
opportunity for Uber to enter into different markets throughout the globe.
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M3 Strategies to improve competitive edge and market position
There are a number of strategies that can be used by Uber in order to improve
competitive edge. In order to do so they can use market development and diversification. Market
development requires study of various potential markets where company can successfully set up
their services (Leischnig, Woelfl and Ivens, 2016). Also like Uber eats they can look into various
other ventures which will help company to enter into different sectors. They also need to
improve their financial positions for expansion of business as diversification required huge
investments.
TASK 4
P4 Interpret and devise strategic planning through different theories
Porter's generic strategy
Porter's generic strategy was developed by Michael Porter which was developed to help
companies take competitive advantage over their competitors. Four strategies included in this are
mentioned below:
In this strategy of cost leadership company focuses on selling their products and services
on a lower price than that of their competitors in order to earn cost leadership and an advantage
over their competitors.
As per differentiation strategy Uber needs to focus on the quality of services they are
providing to their customers (McAdam, Bititci and Galbraith, 2017). It is necessary to provide
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better services than that of their customers to build loyal customers and attain a competitive
advantage.
In cost focus strategy company tries to use advantage of lower costs with all those
customers who are most affected due to change in costs. This will help organisation to
successfully develop loyal customers in competitive market.
In differentiation focus strategy company targets niche market with their unique
strategies in order to ensure brand loyalty of customers in long run.
As of now Uber is using both these strategies of cost leadership and product
differentiation as the are providing services at lower costs and also using differentiation through
their technologies. This is also known as Hybrid Strategy, through which organisation pays
equal attention to cost leadership as well as differentiation.
Diversification is another strategy that can be successfully used by company. Uber have
already used it once when they started delivering food on doorsteps through their new venture ,
UBER EATS. They can look for more new opportunities however such innovations require huge
investments by organisation. This strategy have enables Uber to enter into new markets.
Providing more than one service also enables organisation to increase their consumer base and
profit. It generates brand image and good reputation for the firm as well.
Vertical integration is another way in which company can develop through growing their
business by acquiring their competitors. Uber can successfully join hands with various cab
providing facilities for vertical integration. In order to do so Uber is looking out to join hands
with other organisation in the same industry. On the other hand for Horizontal integration is
when company is expanding through acquisition of companies falling before and after them in
supply chain. The horizontal acquisition for Uber can be acquisition of their technology provider
and marketing teams.
M4 Strategic management plan with tangible and tactical strategic priorities and objectives
Major objective of business is to enter into new markets and increase their revenues and
profits. Tangible strategies that can be used by business includes diversification and hybrid
strategy. Business is successfully using cost leadership and differentiation in their hybrid
strategy. However, various tactical strategies for business will include, building new innovations
and providing new services. They need to focus upon research and development in order to do so
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(Maniora, 2018). Company can also attain cost advantage to attain cost leadership through
keeping their margins low.
D1 Produce a set of valid strategic directions, objectives and actions
In order to successfully move on for development and diversification the business is
required to work on generating funds and attaining resources. The first strategic direction of
company is to move towards attainment of resources and making their optimum utilisation. The
objectives of business is to increase their revenue, provide best services to their customers and to
provide benefit and higher incomes to the drivers related with them. The actions of organisation
is to use hybrid strategy in which they will adopt both cost leadership and product differentiation
successfully.
CONCLUSION
The above report helps in concluding importance of various external as well as internal
capabilities of an organisation to devise its strategy. Due to this it is necessary for businesses to
continuously focus on various factors affecting business functions. After identifying strengths
and weaknesses of a business, organisation can use different strategies that can be applied
successfully based on objective, vision and mission of business. These strategies work as
roadmap and provide direction to business in order to achieve all the objectives and increase
their success in competitive advantage.
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